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Benefits of Marketing Channels

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Marketing channels consist of channel members who perform many functions. Marketing channels, particularly, indirect channels (wholesaler, retailers, and agents), perform many functions to facilitate availability of products to consumers with ease. Their functions offer benefits or services to manufacturers on one hand and to the consumers on the other hand.

Nowadays, marketing channel plays a crucial role for both, producers and ultimate consumers. It is a vital link between the primary producers and the ultimate consumers. For many products, it is difficult to think about successful implementation of marketing strategy without active involvement of marketing channel.

In short, it has an essential, even indispensable, place in today’s marketing to achieve maximum possible consumer satisfaction. Marketers treat marketing channel as a part of their strategies. Marketing channel or channel of distribution has important role due to the services it renders. Main services or benefits offered by marketing channel can be classified into two groups-services to consumers and services to producers.

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Let us discuss various services offered by marketing channel individually:

Services to Producers:

Followings are main services offered by channel members to producers:

1. Transporting:

Middlemen are actively involved in transporting goods from producers to consumers. Channel members carry out transporting or physical movement of products. Channel members make all necessary arrangements to transport products from the producers to the distribution centers.

2. Place Constraints:

Due to active role of middlemen, place constraints can be removed. Products can be made available at all the places where consumers reside. Thus, it increases place utility.

3. Concentration on Production:

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Since producers are not required to carry out distribution activities, they can concentrate their full attention on production side. Production efficiency can be improved. They are able to sell products of better quality at low price. Producers can improve their competitive strengths.

4. Information Link:

Channel members are among the most reliable sources of information. Middlemen update company’s knowledge about market. Producers can receive information about the latest developments at the market place. It facilitates the producers to adjust marketing strategy with market changes.

5. Promotion:

Middlemen, including wholesalers, agents, and retailers, also carry out several market promotion activities on behalf of producers. They assist producers in implementing promotion strategies on one hand, and perform certain promotion activities by their own on the other hand. Sales promotion activities are not possible without middlemen.

7. Negotiating:

They negotiate on a company’s behalf. They communicate terms and conditions with buyers and try to arrive at transaction. Virtually, a company cannot directly negotiate with consumers.

8. Ordering and Financing:

Apart from several important services, middlemen facilitate producers by placing advanced orders. Producers can find it easy to make successful production planning. In the same way, they also pay their bills in advance. This can meet their working capital needs. Many times, middlemen with sound financial position can lend money at a very liberal terms and conditions.

9. Risk Bearing:

Once they place orders, all the risks associated with products are borne by middlemen. Producers are not required to worry.

10. Economy:

Middlemen can provide better services to consumers than producers. Compared to commission changed or profit margin added by middlemen, more services are provided. Company can hardly do the same at the same rate.

Services to Consumers/users:

List of services provided by middlemen to consumers may include:

1. Credit Facility:

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Middlemen sell products to consumer on credit. Consumers can postpone payment for a certain time. Consumers are not deprived of the necessary products due to temporary financial problems. They also help consumers borrow money from various sources.

2. Better Selection:

Wholesalers and retailers sell products of many companies. So, consumers find it easy to select the most suitable products from any retail outlet nearby their residence.

3. Educating and Communicating:

Consumers can get necessary information about products, price, and related benefits from middlemen. Also, middlemen educate and train consumers about how to use products safely.

4. Easy Accessibility:

Wholesalers and retailers are spread everywhere. They are scattered according to the consumer density. So, it is more comfortable for consumers to buy products of the reputed companies anywhere.

5. After-sales Services:

Middlemen provide a number of post-sales services to consumers, including home delivery, installation, repairing, exchanging and replacing, providing accessories, etc. Such services are valuable for consumers.